BAGHDAD, June 10: The US-led administration in Iraq admitted on Tuesday it was printing hundreds of thousands of Saddam Hussein banknotes in defiance of its own ban on his image as it steps up efforts to revive a moribund economy.

The administration’s head, Paul Bremer, unveiled a 100-million-dollar fund for public works projects to tackle chronic joblessness which he put at more than 50 percent even before the war.

And he announced a new business support and information centre to stimulate domestic and foreign investment and advise on reform of Iraq’s highly regulated and centralised economy.

He acknowledged that the decision to print the new Saddam banknotes had been embarrassing for him personally, but added there had been no alternative to maintain confidence in the money supply.

“Since I issued the instrument telling people to do away with images of Saddam Hussein, I guess you could say it’s not a joy anyway,” Bremer told a news conference.

He said his administration had come under enormous pressure from Iraqis to remedy the shortage of 250 dinar notes, as the 10,000 dinar bill, the only other one in circulation, trades at a sharply reduced rate against the dollar.

While moneychangers are prepared to buy the 250 dinar notes at the usual market rate, which currently stands at some 1,400 dinars to the dollar, the 10,000 dinar bills are marked down by 25 percent.

Bremer said his administration was eager to remedy the problem to get the economy going again, and was printing the extra 250 dinar notes to offer at face value against the larger bills so that confidence could be restored.

“This seems to us the least bad solution even if it does mean printing notes with Saddam’s face on it,” he said.

The decision to print new Saddam banknotes is particularly damaging as it comes as US troops continue to take casualties in what commanders say is a guerrilla war with diehard loyalists of the ousted strongman.

Bremer himself acknowledged the continuing threat posed by the failure to find Saddam, dead or alive, two months after his fall.—AFP